When someone passes away in Texas, the executor (sometimes called an administrator) has four essential functions. They are as follows:
- Presenting the will (if one exists).
- Identify and collect estate assets.
- Pay any debts owed by the deceased at the time of their death.
- Distribute the remaining money and property according to the terms of the will or the Texas law of intestate succession (if there was no will).
Presenting the Will
The first step is presenting the will to the probate court to ensure that all property is transferred as specified. After the judge issues an order authorizing the named executor to act, that executor has the authority to transfer assets, access financial accounts, communicate with third parties, and carry out their other responsibilities.
Identifying and Collecting Estate Assets
The executor must take an inventory of estate assets in order to accurately transfer property and pay any financial obligations. They make a list of personal property, assets with titles (such as vehicles and real estate), and financial holdings, such as investments and bank accounts. In addition:
- If the estate includes property in another state, the executor will start another probate process in that state for its disposition.
- If the deceased owned a business that requires management, the executor may seek assistance from the probate court to establish a trust.
Paying Estate Debts and Taxes
The executor will notify all creditors about the person’s death and validate any claims before paying them to ensure that they are legitimate debts. Other duties include:
- Filing tax returns for the decedent and the estate and paying any taxes due
- Notifying the Social Security Administration regarding benefits payments
- Canceling credit cards
Any assets that remain after all financial obligations are satisfied are then distributed.
At this stage, the executor’s primary responsibility is ensuring that all named beneficiaries receive the property left to them in the will. This means that they must:
- Locate these beneficiaries
- Distribute the assets in accordance with the terms of the will
If an asset is not named in the will, the executor will distribute it according to Texas law. Once all distributions are complete, they return to the probate court and ask it to close the estate and discharge them as the executor.
Estate executors have certain fiduciary responsibilities to the heirs and beneficiaries. They are:
- The duty of loyalty: Every action taken by the executor must be for the benefit of the estate heirs and beneficiaries. They can never disclose information about the estate to unauthorized parties, favor their personal interests over those of the beneficiaries, or realize a profit in business dealings with the estate.
- The duty of prudence: An executor must exercise diligence, care, and prudence in dealing with the assets of the estate.
- The duty to preserve assets: An executor must provide sufficient security and protection for estate assets. This includes but is not limited to obtaining sufficient insurance coverage and maintaining a separate bank account for estate money.
These responsibilities remain the name regardless of whether the probate administration is dependent or independent.
Dependent vs. Independent Administration
In Texas, the default is a dependent administration, which means that the executor relies on the authority and supervision of the court to take actions in the probate process, such as sell assets and pay debts. In addition, they must file accountings with the court every year that the probate case continues. This higher level of scrutiny can involve a lot of time and expense, but it helps estate heirs and beneficiaries feel confident that the administrator has properly completed their duties.
Heirs or beneficiaries of an estate can opt to have the court waive the dependent administration requirement and appoint an independent administration, which is less expensive and time-consuming. In this situation, the estate executor distributes assets, pays bills, and carries out their duties without court oversight.
Contact a Texas Probate Attorney
Administration of an estate can be difficult, especially if there are assets located outside Texas or the deceased had significant business holdings. If you are named as the executor of a complicated estate, an experienced Texas probate attorney can answer challenging questions and help you make the right decisions.
At Romano & Sumner, we are committed to helping Texas estate executors administer estates effectively and efficiently. This includes advice and support with accountings, asset distribution, and debt payments. For more information on how we can support you as executor of a loved one’s estate, contact Romano & Sumner today.